Derek C. M. van Bever

Derek van Bever is a Senior Lecturer in the General Management Unit. He teaches Building and Sustaining a Successful Enterprise in the second year elective curriculum. He is also the Director of the Forum for Growth and Innovation, a research project sponsored by Professor Clay Christensen that is focused on discovering, developing and disseminating predictive theory on management and innovation.

Derek is a co-founder of The Advisory Board Company (NASDAQ: ABCO), a global research, consulting, and technology firm serving hospital and university executives, and was a member of the founding executive team of The Corporate Executive Board (NYSE: CEB), a global thought leadership and advisory network, which spun out of the Advisory Board Company in a highly successful 1999 Initial Public Offering. The Corporate Executive Board is now the world’s largest executive advisory network, with annual revenue over $800 million and a membership spanning over 50 countries and including executives from 85% of the Fortune 500 and 50% of the Dow Jones Asian Titans.

In his role as Chief Research Officer for the Corporate Executive Board, Derek directed teams studying best practices in strategy, innovation, talent management, finance and governance in the large-corporate sector worldwide. He oversaw the development and launch of the firm’s new practice areas following the IPO, and he led the development of the firm’s internal corporate academy. He co-authored the book Stall Points, an analysis of the growth experience of the Fortune 100 across the past half-century, which was published by Yale University Press in 2008. An article based on the book, entitled “When Growth Stalls,” appeared in the May 2008 Harvard Business Review and won the McKinsey Award for that year. His survey of the CEOs of newly-public companies, “The Perfect Storm: How the IPO Experience Threatens Good Work for Leaders of the Young Public Company,” was published as part of the Harvard Graduate School of Education’s GoodWork series, edited by Howard Gardner.

Derek is a 1988 graduate of HBS and a 2011 graduate of Harvard Divinity School. His divinity school thesis, “A Mission Beyond Commerce,” examines the challenges to personal and corporate mission posed by pivot points such as a change of ownership or leadership transition and suggests practices and disciplines for retaining a sense of perspective in the “high hurry” of business life. His current interests include both environmental and personal sustainability, and he has taught on the connection between sustainability and faith in Boston University School of Management’s MBA program.

Derek lives in Cambridge, Massachusetts, with his wife and three children. He was a founding board member of the Firefly Children’s Network and the National Society of Collegiate Scholars and is an elder in the Presbyterian Church.

Publications

With a young, urbanizing population, abundant natural resources, and a growing middle class, Africa seems to have all the ingredients necessary for huge growth. Nevertheless, a number of multinationals have recently left the continent, discouraged by widespread corruption, a lack of infrastructure and ready talent, and an underdeveloped consumer market. Some innovators, however, have succeeded by building franchises to serve poorer consumer segments; tapping the vast opportunity represented by nonconsumption; internalizing risk to build strong, self-sufficient, low-cost enterprises; and integrating operations to avoid corruption. The difference, the authors believe, lies in the choice between “push” and “pull” investment. MNCs seek growth by pushing current products onto emerging middle-class consumers. They retain some large portion of their existing cost structure and operating style, and thus set prices that limit market penetration. The winning strategy diverges from this approach in almost every respect. When innovators develop products that people want to pull into their lives, they create markets that serve as a foundation for sustainable growth and prosperity.

Sixty months after the 2008 recession ended, the economy was still sputtering, producing disappointing growth and job numbers. Corporations seemed stuck: Despite low interest rates, they were sitting on massive piles of cash and failing to invest in new initiatives. In this article, a leading innovation expert and his HBS colleague explore the reasons for this sluggishness. The crux of the problem, they say, is that investments in different types of innovation have different effects on growth but are all evaluated using the same (flawed) metrics. "Performance-improving innovations," which replace old products with better models, and "efficiency innovations," which lower costs, don't produce many jobs. (Indeed, efficiency innovations eliminate them.) "Market-creating innovations," which transform products so radically they create a new class of consumer, do generate jobs for their originators and for the economy. But the assessment metrics that financial markets—and companies—use always show efficiency and performance-improving innovations to be better opportunities. This is the capitalist's dilemma: Doing the right thing for long-term prosperity is the wrong thing for investors, according to the tools that guide investments. Those tools, however, are based on an unexamined assumption: that capital is scarce, and that performance should be assessed by how efficiently companies use it. The truth is, capital is no longer scarce, and our tools need to catch up to that reality.

Consulting fundamental business model has not changed in more than 100 years: very smart outsiders go into organizations for a finite period of time and recommend solutions for the most difficult problems confronting their clients. But at traditional strategy-consulting firms, the share of work that is classic strategy has sharply declined over the past 30 years, from 60% or 70% to only about 20%. What accounts for this trend? Disruption is coming for management consulting, the authors say, as it has recently come for law. For many years the professional services were immune to disruption, for two reasons: opacity and agility. Clients find it very difficult to judge a firm's performance in advance, because they are usually hiring it for specialized knowledge and capability that they themselves lack. Price becomes a proxy for quality. And the top consulting (or law) firms have human capital as their primary assets; they aren't hamstrung by substantial resource allocation decisions, giving them remarkable flexibility. Now incumbent firms are seeing their competitive position eroded by technology, alternative staffing models, and other forces. Market research companies and database providers are enabling the democratization of data. The vast turnover at consultancies means armies of experienced strategists are available for hire by former clients, whose increasing sophistication allows them to allocate work instead of relying on one-stop shops as they did in the past. Drawing on the theory of disruption, the authors offer three scenarios for the future of consulting.

This article includes a one-page preview that quickly summarizes the key ideas and provides an overview of how the concepts work in practice along with suggestions for further reading.
An abrupt and lasting drop in revenue growth is a crisis that can strike even the most exemplary organization. The authors' comprehensive analysis of growth in Fortune 100-size companies over the past half century revealed, in fact, that 87% of them had stalled out at least once. The record shows that if management cannot turn a company around within a few years, the odds are that it will never again see healthy top-line growth. Fortunately, the authors (of the Corporate Executive Board) have uncovered and categorized the most common causes of growth stalls. The majority of these standstills are preventable because, according to the authors, they arise from management choices about strategy or organizational design; external factors (e.g., regulatory actions) account for only 13%. Four categories predominate: Premium-position captivity. When a firm's world-class offering has won the most demanding customers in the market, it often fails to respond effectively to new, low-cost competitive challenges or shifts in customer valuation of product features. Innovation management breakdown. Because most large corporations generate sequential product innovations, any systemic inefficiency or dysfunction in the innovation chain can cause extremely serious problems that last for years. Premature core abandonment. Managers may conclude too quickly that a core market is saturated. Or they may incorrectly interpret operational impediments in the core business as evidence that it's time to move into new competitive terrain. Talent bench shortfall. Insufficient capabilities will stop growth dead in its tracks. They also identified a common culprit in detailed case studies of 50 stalled companies--failure to adapt company strategy to changes in the external environment. Two tools can help managers avoid growth stalls: a self-test to diagnose impending stalls and a choice of practices to explicitly identify strategic assumptions and test them for ongoing relevance.

Tolaram is a Singaporean company that began operations selling textiles in Nigeria in the 1970s. Executives and brothers, Haresh and Sajesh Aswani, however, saw an opportunity to create an instant noodle market in the country. In 1988, they began importing Indomie noodles. But in order to truly target the local market, Tolaram decided to build manufacturing and distribution capabilities in Nigeria at a time when conventional wisdom advised against it. After a very difficult journey, Tolaram has grown to almost $1 billion in turnover, built and operates 13 manufacturing plants in Nigeria, and runs a 1,000+ plus truck logistics company. This case gives an overview of how Tolaram, a company that is a prime example of market-creating innovation in a developing economy, built Indomie noodles from obscurity to become one of the most recognized brands in Nigeria.